Who's Who in Your Life Insurance Contract
Life insurance contracts can be confusing, but comprehending each person’s role will help you better understand the services that are being provided to you.
In a life insurance contract, the insurance company is the entity that is providing you with coverage, and also the entity that will be paying any benefits due from the contract should the need arise.
Next we have the insured, who is the person applying for insurance and paying the premiums each month. The insured is most often, but not always, the owner of their life insurance policy.
After the owner, we have the beneficiary, who is the person who will receive the benefits from the policy should the policyholder die. You may choose any person you wish to be your beneficiary, your spouse, parent, child, grandchild, and so on. You may also choose to make your estate your beneficiary as well.
Finally there is the underwriter, who is the person who determines whether or not the person seeking insurance is eligible for the amount of coverage they are applying for, or even at all. The underwriter looks at your application and the results of your medical exam, and from that decides the next step, whether it be approval, reapplication for lesser coverage, or denial.
Knowing the role of each person in the process can make applying for life insurance a smoother, easier process.
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